BEDMINSTER, NJ--(Marketwired - Jan 30, 2014) - Peapack-Gladstone Financial Corporation (NASDAQ: PGC) (the "Corporation" or the "Company") recorded net income of $2.40 million and diluted earnings per share of $0.25 for the quarter ended December 31, 2013.

Doug Kennedy, President and CEO, said, "We had another solid quarter of accomplishment, including achieving several new records."

We continued to implement and follow through on our Strategic Plan -- "Expanding Our Reach." The Plan focuses on the client experience and aggressively building and maintaining a private banking platform.

In support of the growth associated with the Plan, we successfully raised $42 million (gross) of common equity in a rights offering and sale to standby investors that closed on December 12, 2013. Over 52 percent of the offering was subscribed by existing shareholders. The remainder was purchased by nine pre-arranged standby investors, the majority of which were new institutional shareholders in the Company.

Total end of year loan balances reached another record level for the Company -- $1.57 billion. This level reflected an increase of $442 million or 39 percent from the balance at December 31, 2012, and included an increase of $177 million in the fourth quarter of 2013.

Total deposits also reached another record level. The end of year balance of $1.65 billion reflected an increase of $131 million or nearly nine percent from the balance at December 31, 2012, and included an increase of $75 million in the fourth quarter of 2013.

The Company's net interest income for the December 2013 quarter reached another quarterly record level -- $14.53 million. This level reflected improvement when compared to $12.76 million for the December 2012 quarter, and also reflected improvement when compared to $13.37 million for the immediately preceding September 2013 quarter.

At December 31, 2013, the market value of assets under administration at the Bank's Wealth Management Division of $2.69 billion was also another record for the Company. This level reflected an increase of 17 percent from the balance at December 31, 2012.

Fee income from Peapack-Gladstone Bank's Wealth Management Division of $3.55 million for the December 2013 quarter reflected growth of over 21 percent when compared to the $2.93 million for the December 2012 quarter.

Total revenue (net interest income plus other income) of $19.50 million for the December 2013 quarter reflected improvement when compared to prior quarters in 2013.

Trends in asset quality continue to demonstrate strong improvement when compared to prior periods. For example, nonperforming assets declined in both dollars and as a percentage of assets, to just 0.44 percent of total assets as of December 31, 2013, compared to 0.91 percent of total assets as of December 31, 2012.

The book value per share at December 31, 2013 of $14.79 reflected improvement when compared to $14.12 at September 30, 2013 and $13.87 at December 31, 2012.

Capital ratios were benefitted by the December 2013 capital raise and were improved and very strong as of December 31, 2013, even with nearly $300 million growth in assets for the year, as well as migration of lower risk weighted investment security cash flows into loans.

The $3.53 million pre-tax income, $2.40 million net income and $0.25 fully diluted earnings per share for the December 2013 quarter were negatively impacted by a $204 thousand ($128 thousand net of tax) search fee related to the new head of Wealth Management and also $602 thousand ($378 thousand net of tax) of accelerated depreciation expense related to the closing of our Operations Center and consolidation of the staff into our Administration building and equipment to an off-premises third party location.

Mr. Kennedy noted, "As we previously announced, John Babcock will join the Company, effective March 10, 2014, as the head of private wealth management. John is a proven leader in the wealth management space and will be a tremendous asset to the Company as we continue to execute our strategy."

Finn Caspersen Jr., Senior Executive Vice President and Chief Operating Officer of the Company, commented, "We are pleased to now have all of our operations support staff consolidated into our Administration building and our core operating system equipment located at an off-premises third party location. These moves have created operating efficiencies; reduced risk from a disaster preparedness perspective; and created a savings relative to ongoing premises and equipment expenses."

Net Interest Income and MarginNet interest income was $14.53 million for the fourth quarter of 2013, reflecting an increase of $1.77 million from the same quarter last year. The net interest margin, on a fully tax-equivalent basis, was 3.26 percent for the December 2013 quarter compared to 3.42 percent for the December 2012 quarter.

Net interest income for the current 2013 quarter benefitted from significant loan growth during 2013, principally multifamily and commercial mortgage, funded by deposits, borrowings, and a decline in lower yielding investment securities and interest earning cash balances.

Net interest margin for the December 2013 quarter declined when compared to the December 2012 quarter due to the effect of low market yields, which compressed asset yields more than deposit costs. The 3.26 percent net interest margin for the December 2013 quarter showed only minor compression when compared to the 3.28 percent for the immediately preceding September 2013 quarter.

Average Loans/Loan OriginationsFor the fourth quarter of 2013, average loans totaled $1.49 billion as compared to $1.13 billion for the same quarter in 2012, reflecting an increase of $366 million, or 33 percent. The average commercial mortgage and commercial loan portfolio for the quarter ended December 2013 increased $358 million, or 68 percent, from the same quarter of 2012. The increase was attributable to a more concerted focus on this type of business in both the New Jersey and New York City markets, as well as demand from high-quality borrowers looking to refinance multifamily and other commercial mortgages held by other institutions.

Total loan originations were $243 million for the fourth quarter of 2013, up significantly from $116 million for the same quarter of 2012. Loan originations were $779 million for the twelve months ended December 31, 2013, also up significantly from $397 million for the same twelve month period of 2012. Included in the total were commercial mortgage (principally multifamily) / commercial loan originations of $551 million and $202 million for the twelve months and three months ended December 31, 2013, respectively, compared to $150 million and $55 million for the 2012 periods, respectively.

Mr. Kennedy said, "We are focused on generating solid lending growth, and we have been successful. As part of our Strategic Plan, we introduced a comprehensive Commercial & Industrial (C&I) lending program and we have closed $97 million of volume for the year. We expect such volume to continue to increase in future periods. Further, our multifamily and commercial real estate lenders have generated significant closed volume and continue to maintain very robust pipelines."

Average DepositsFor the December 2013 quarter, average total deposits (interest-bearing and noninterest-bearing) increased $216 million or 15 percent when compared to the same quarter last year. Over that same period, the Company saw growth in each of its deposit categories, except certificates of deposit. For the fourth quarter of 2013, average certificates of deposit (CDs) declined $23 million from the same 2012 quarter. These higher-cost CDs were replaced with lower-cost, more stable core deposits.

The Company continues to successfully focus on:

Business and personal relationships;

Municipal relationships within its market territory; and

Growth in deposits associated with its private banking and its lending activities.

Mr. Kennedy commented, "We will continue to place intense focus on providing high touch client service and growing our strong core deposit base. Service is a key differentiator for us that will enable us to grow our business. In addition, we now have a full array of Cash Management products in place that will help support our growth in C&I lending."

Wealth Management BusinessIn the fourth quarter of 2013, Peapack-Gladstone Bank's wealth management business generated $3.55 million in fee income compared to $2.93 million for the fourth quarter of 2012, reflecting growth of 21 percent. The market value of the assets under administration (AUA) of the wealth management division was $2.69 billion at December 31, 2013, up from $2.30 billion at December 31, 2012 and $2.58 billion reported at September 30, 2013. The growth in fee income and AUA was due to new business, market value improvement, as well as solid investment advisory and management.

Mr. Kennedy noted, "We were pleased with the results of our Delaware Trust & Investment subsidiary which ended the year with nearly $100 million in assets under administration." Our wealth management business differentiates us from many of our competitors and adds significant value to our Company. Conversations with all clients and potential clients across all lines of business include a wealth discussion, which will help them to establish, maintain, and/or expand their legacy.

Other Noninterest IncomeIn the December 2013 quarter, other noninterest income, exclusive of wealth management fees and securities gains, totaled $1.30 million, reflecting a decrease of $42 thousand or 3 percent when compared to the same quarter a year ago. The fourth quarter of 2013 included $171 thousand of income from the sale of newly originated residential mortgage loans, down from $370 thousand in the same 2012 quarter. Mr. Kennedy noted, "Due to the rise in mortgage rates earlier this year, a decrease in residential mortgage loan originations and resultant mortgage banking income was expected and planned for. Reduced levels of mortgage banking income are expected to be ongoing. Fortunately, mortgage banking income is not a significant portion of revenue (under two percent of total revenue for the twelve months ended December 31, 2013). Further, we have reduced our overhead expense associated with mortgage banking; we have taken steps to improve our loan volume on the commercial front which has and will improve net interest income; and we have introduced Cash Management services/products, which we expect will contribute to noninterest income in the future."

Securities gains were $125 thousand for the December 2013 quarter compared to $3.08 million for the December 2012 quarter. The December 2012 quarter included a $2.87 million gain on the Company's negotiated sale of its entire pooled trust preferred securities portfolio.

Operating ExpensesThe Company's total operating expenses were $14.65 million for the fourth quarter of 2013 compared to $13.55 million in the same 2012 quarter. The 2013 quarter included the previously mentioned $204 thousand search fee for the new head of our Wealth Management Division and the $602 thousand accelerated depreciation expense related to the consolidation of the operations center staff and equipment. The 2012 quarter included a $929 thousand severance accrual related to certain senior management changes, and $336 thousand of costs related to the CEO search which brought Mr. Kennedy to the Company in October 2012. After excluding these items, operating expenses increased $1.59 million in the December 2013 quarter compared to the December 2012 quarter. Salary and benefits expense rose in the 2013 quarter from the 2012 quarter principally due to strategic hiring in line with the Company's Strategic Plan, as well as normal salary increases and increased bonus/incentive and profit sharing accruals. The 2013 expense levels also included various professional and other fees associated with various training and consulting, some of which was associated with the Strategic Plan.

Mr. Kennedy noted, "We expected higher operating expenses in 2013 relative to 2012. We expect that the trend of higher operating expenses will continue in 2014 as we bring on high caliber revenue producers, and continue to invest in our infrastructure in line with our Strategic Plan. Further, we generally expect revenue and profitability related to new personnel to lag those expenses by several quarters. It is important to note, however, that we did see an improvement in revenue in each of the quarters this year, and particularly in the December 2013 quarter as our plan began to gain momentum later in the year."

Provision for Loan Losses / Asset QualityFor the quarter ended December 31, 2013, the Company's provision for loan losses was $1.33 million compared to a $4.53 million provision recorded in the fourth quarter of 2012. Charge-offs, net of recoveries, for the fourth quarter of 2013 were $8 thousand compared to $5.68 million for the December 2012 quarter. The 2012 charge-off level included charge-offs related to $19 million of classified loans strategically moved to loans held for sale at December 31, 2012. These loans were sold in the first quarter of 2013 resulting in a gain of $522 thousand.

At December 31, 2013 the allowance for loan losses was 232 percent of nonperforming loans and 0.98 percent of total loans. Nonperforming assets totaled $8.6 million or just 0.44 percent of total assets at December 31, 2013 compared to $15.2 million or 0.91 percent of assets at December 31, 2012. The 0.44 percent nonperforming asset ratio, at December 31, 2013, compares favorably to a 1.20 percent weighted average for all Mid-Atlantic banks.

Capital / DividendsAt December 31, 2013, after accounting for the capital raise, the Company's leverage ratio, tier 1 and total risk based capital ratios were 9.00 percent, 14.07 percent and 15.33 percent, respectively. The Company's ratios are all significantly above the levels required to be considered well-capitalized under regulatory guidelines applicable to banks. The Company's common equity ratio (common equity to total assets) at December 31, 2013 was 8.68 percent of total assets, up when compared to 7.32 percent at December 31, 2012.

On January 23, 2014, the Board of Directors declared a regular cash dividend of $0.05 per share payable on February 21, 2014 to shareholders of record on February 6, 2014.

ABOUT THE COMPANYPeapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $1.97 billion as of December 31, 2013. Founded in 1921, Peapack-Gladstone Bank is a commercial bank that provides innovative private banking services to businesses, non-profits and consumers which help them to establish, maintain and expand their legacy. Through its private banking locations in Bedminster, Morristown, Princeton and Teaneck, its wealth management division, and its branch network and online platforms, Peapack-Gladstone Bank offers an unparalleled commitment to client service.

The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management's confidence and strategies and management's expectations about new and existing programs and products, investments, relationships, opportunities and market conditions. These statements may be identified by such forward-looking terminology as "expect", "look", "believe", "anticipate", "may", or similar statements or variations of such terms. Actual results may differ materially from such forward-looking statements. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to

inability to successfully grow our business and implement our strategic plan, including an inability to generate revenues to offset the increased personnel and other costs related to the strategic plan;

inability to manage our growth;

a continued or unexpected decline in the economy, in particular in our New Jersey and New York market areas;

higher than expected increases in loan losses or in the level of nonperforming loans;

unexpected changes in interest rates;

a continued or unexpected decline in real estate values within our market areas;

legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Basel III and related regulations) subject us to additional regulatory oversight which may result in increased compliance costs;

successful cyber attacks against our IT infrastructure and that of our IT providers;

higher than expected FDIC insurance premiums;

lack of liquidity to fund our various cash obligations;

reduction in our lower-cost funding sources;

our inability to adapt to technological changes;

claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters; and

other unexpected material adverse changes in our operations or earnings.

A discussion of these and other factors that could affect our results is included in our SEC filings, including our Annual Report on form 10-K for the year ended December 31, 2012. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Corporation's expectations.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

(Tables to Follow)

PEAPACK-GLADSTONE FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in Thousands)

(Unaudited)

As of

Dec 31,

Sept 30,

June 30,

March 31,

Dec 31,

2013

2013

2013

2013

2012

ASSETS

Cash and due from banks

$

6,534

$

5,886

$

5,978

$

5,030

$

6,733

Federal funds sold

101

101

101

100

100

Interest-earning deposits

28,512

33,528

60,783

94,147

112,395

Total cash and cash equivalents

35,147

39,515

66,862

99,277

119,228

Securities held to maturity

-

-

-

-

-

Securities available for sale

268,447

273,952

270,334

283,448

304,479

FHLB and FRB Stock, at cost

10,032

7,707

4,729

4,643

4,639

Loans held for sale, at fair value

2,001

724

4,684

1,828

6,461

Loans held for sale, at lower of cost or fair value

-

-

-

-

13,749

Residential mortgage

532,911

527,927

532,356

523,051

515,014

Commercial mortgage

831,997

680,762

534,371

455,670

420,086

Commercial loans

131,795

110,843

106,598

105,305

115,372

Construction loans

5,893

8,390

9,179

9,180

9,328

Consumer loans

21,852

19,932

19,552

20,782

21,188

Home equity lines of credit

47,905

47,020

47,583

46,778

49,635

Other loans

1,848

2,075

2,545

997

1,961

Total loans

1,574,201

1,396,949

1,252,184

1,161,763

1,132,584

Less: Allowance for loan losses

15,373

14,056

13,438

13,279

12,735

Net loans

1,558,828

1,382,893

1,238,746

1,148,484

1,119,849

Premises and equipment

28,990

29,022

29,021

29,429

30,030

Other real estate owned

1,941

2,759

3,347

4,141

3,496

Accrued interest receivable

4,086

4,017

3,972

3,768

3,864

Bank owned life insurance

31,882

31,691

31,490

31,283

31,088

Deferred tax assets, net

9,762

7,951

8,608

10,384

9,478

Other assets

15,832

17,473

17,797

18,647

21,475

TOTAL ASSETS

$

1,966,948

$

1,797,704

$

1,679,590

$

1,635,332

$

1,667,836

LIABILITIES

Deposits:

Noninterest-bearing demand deposits

$

356,119

$

345,736

$

326,916

$

307,730

$

298,095

Interest-bearing deposits

Checking

388,340

338,626

352,196

336,934

346,877

Savings

115,785

115,571

115,823

114,804

109,686

Money market accounts

630,173

611,498

559,439

547,302

583,197

CD's $100,000 and over

61,128

62,136

65,607

67,902

68,741

CD's less than $100,000

95,705

98,996

102,945

106,432

109,831

Total deposits

1,647,250

1,572,563

1,522,926

1,481,104

1,516,427

Overnight borrowings

54,900

30,361

-

-

-

Federal home loan bank advances

74,692

47,692

12,000

12,099

12,218

Capital lease obligation

8,754

8,809

8,864

8,918

8,971

Other Liabilities

10,695

11,861

11,687

8,605

8,163

TOTAL LIABILITIES

1,796,291

1,671,286

1,555,477

1,510,726

1,545,779

Shareholders' equity

170,657

126,418

124,113

124,606

122,057

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,966,948

$

1,797,704

$

1,679,590

$

1,635,332

$

1,667,836

Assets under administration at PGB Trust & Investments (market value, not included above)

$

2,690,601

$

2,581,813

$

2,520,424

$

2,544,465

$

2,303,612

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED BALANCE SHEET DATA

(Dollars in Thousands)

(Unaudited)

Dec 31,

Sept 30,

June 30,

March 31,

Dec 31,

2013

2013

2013

2013

2012

Asset Quality:

Loans past due over 90 days and still accruing

$

-

$

-

$

-

$

-

$

-

Nonaccrual loans

6,630

6,891

8,075

11,290

11,732

(C

)

Other real estate owned

1,941

2,759

3,347

4,141

3,496

Total nonperforming assets

$

8,571

$

9,650

$

11,422

$

15,431

$

15,228

(C

)

Nonperforming loans to total loans

0.42

%

0.49

%

0.64

%

0.97

%

1.04

%

(C

)

Nonperforming assets to total assets

0.44

%

0.54

%

0.68

%

0.94

%

0.91

%

(C

)

Accruing TDR's (A)

$

11,114

$

6,133

$

6,131

$

5,986

$

6,415

(C

)

Loans past due 30 through 89 days and still accruing

$

2,953

$

2,039

$

1,544

$

1,791

$

3,786

Classified loans (B)

$

33,827

$

32,430

$

32,123

$

35,945

$

32,014

(C

)

Impaired loans (B)

$

17,744

$

16,794

$

17,977

$

21,046

$

18,147

(C

)

Allowance for loan losses:

Beginning of period

$

14,056

$

13,438

$

13,279

$

12,735

$

13,893

Provision for loan losses

1,325

750

500

850

4,525

Charge-offs, net

(8

)

(132

)

(341

)

(306

)

(5,683

)

End of period

$

15,373

$

14,056

$

13,438

$

13,279

$

12,735

ALLL to nonperforming loans

231.87

%

203.98

%

166.41

%

117.62

%

108.55

%

(C

)

ALLL to total loans

0.98

%

1.01

%

1.07

%

1.14

%

1.12

%

(C

)

Capital Adequacy:

Tier I leverage

9.00

%

7.20

%

7.39

%

7.37

%

7.27

%

Tier I capital to risk-weighted assets

14.07

%

11.30

%

11.84

%

12.16

%

11.83

%

Tier I & II capital torisk-weighted assets

15.33

%

12.55

%

13.09

%

13.41

%

13.08

%

Common equity to total assets

8.68

%

7.03

%

7.39

%

7.62

%

7.32

%

(End of period)

Book value per common share

$

14.79

$

14.12

$

13.93

$

14.05

$

13.87

(A)

Does not include $2.9 million at December 31, 2013, $3.3 million at September 30, 2013, $3.3 million at June 30, 2013, $3.3 million at March 31, 2013 and $2.9 million at December 31, 2012 of TDR's included in nonaccrual loans.

(B)

Classified loans include all impaired loans. Impaired loans include all nonaccrual loans and all TDRs.

(C)

Does not include classified Loans Held for Sale, as these loans were carried at lower of cost or fair value and were being marketed for sale as of 12/31/12. The sale closed during Q1 2013.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

LOANS CLOSED AND FUNDED

(Dollars in Thousands)

(Unaudited)

For the Quarters Ended

Dec 31,

Sept 30,

June 30,

March 31,

Dec 31,

2013

2013

2013

2013

2012

Residential loans retained

$

20,135

$

31,517

$

37,352

$

31,430

$

34,699

Residential loans sold

11,743

13,516

26,651

25,402

20,677

Total residential loans

31,878

45,033

64,003

56,832

55,376

CRE

11,972

20,357

17,080

9,490

13,125

Multifamily

152,456

143,727

70,645

27,880

39,160

Commercial loans

37,188

38,433

7,120

14,493

2,790

Small business banking & Installment loans

5,427

4,710

2,866

2,693

2,657

Home equity lines of credit

3,746

3,982

2,619

4,452

2,501

Total loan originations

$

242,667

$

256,242

$

164,333

$

115,840

$

115,609

For the Twelve Months Ended

Dec 31,

Dec 31,

2013

2012

Residential loans retained

$

120,434

$

140,504

Residential loans sold

77,312

79,737

Total residential loans

197,746

220,241

CRE

58,899

64,072

Multifamily

394,707

69,360

Commercial loans

97,234

16,864

Small business banking & Installment loans

15,696

12,673

Home equity lines of credit

14,799

13,460

Total loan originations

$

779,081

$

396,670

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except share data)

(Unaudited)

Dec 31,

Sept 30,

June 30,

March 31,

Dec 31,

2013

2013

2013

2013

2012

Income Statement Data:

Interest income

$

15,738

$

14,423

$

13,460

$

13,432

$

13,792

Interest expense

1,210

1,050

1,012

1,005

1,033

Net interest income

14,528

13,373

12,448

12,427

12,759

Provision for loan losses

1,325

750

500

850

4,525

Net interest income after provision for loan losses

13,203

12,623

11,948

11,577

8,234

Trust fees

3,547

3,295

3,628

3,368

2,929

Gain on sale of classified loans

-

-

-

522

-

Gain on loans sold (Mortgage Banking)

171

277

412

470

370

Other income

1,130

1,022

958

955

973

Securities gains, net

125

188

238

289

3,078

Total other income

4,973

4,782

5,236

5,604

7,350

Salaries and employee benefits

8,308

8,927

7,935

7,079

8,045

Premises and equipment

2,947

2,325

2,338

2,304

2,433

FDIC insurance expense

286

275

280

280

267

Other expenses

3,105

2,638

3,526

2,630

2,808

Total operating expenses

14,646

14,165

14,079

12,293

13,553

Income before income taxes

3,530

3,240

3,105

4,888

2,031

Income tax expense

1,135

1,276

1,096

1,995

973

Net income

2,395

1,964

2,009

2,893

1,058

Dividends and accretion on preferred stock

-

-

-

-

-

Net income available to common shareholders

$

2,395

$

1,964

$

2,009

$

2,893

$

1,058

Total revenue

$

19,501

$

18,155

$

17,684

$

17,509

(A

)

$

17,239

(B

)

(See footnotes below)

Per Common Share Data:

Earnings per share (basic)

$

0.25

$

0.22

$

0.23

$

0.33

$

0.12

Earnings per share (diluted)

0.25

0.22

0.22

0.32

0.12

Performance Ratios:

Return on average assets

0.51

%

0.45

%

0.48

%

0.71

%

0.26

%

Return on average common equity

7.42

%

6.28

%

6.41

%

9.40

%

3.52

%

Net interest margin

(Taxable equivalent basis)

3.26

%

3.28

%

3.22

%

3.28

%

3.42

%

(A)

Excludes a $522 thousand gain from sale of classified loans. Including this gain, total revenue was $18,031.

(B)

Excludes a $2.9 million gain from sale of the Company's Pooled Trust Preferred Securities portfolio. Including this gain, total revenue was $20,109.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

SELECTED CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except share data)

(Unaudited)

For the

Twelve Months Ended

December 31,

2013

2012

Income Statement Data:

Interest income

$

57,053

$

56,090

Interest expense

4,277

4,687

Net interest income

52,776

51,403

Provision for loan losses

3,425

8,275

Net interest income after provision for loan losses

49,351

43,128

Trust fees

13,838

12,282

Gain on sale of classified loans

522

-

Gain on loans sold (Mortgage Banking)

1,330

1,195

Other income

4,065

4,016

Securities gains, net

840

3,810

Total other income

20,595

21,303

Salaries and employee benefits

32,249

27,595

Premises and equipment

9,914

9,467

FDIC insurance expense

1,121

1,208

Other expenses

11,899

10,060

Total operating expenses

55,183

48,330

Income before income taxes

14,763

16,101

Income tax expense

5,502

6,405

Net income

9,261

9,696

Dividends and accretion on preferred stock

-

474

Net income available to common shareholders

$

9,261

$

9,222

Total revenue

$

72,849

(A

)

$

69,836

(B

)

(See footnotes below)

Per Common Share Data:

Earnings per share (basic)

$

1.02

$

1.05

Earnings per share (diluted)

1.01

1.05

Performance Ratios:

Return on average assets

0.54

%

0.61

%

Return on average common equity

7.37

%

8.03

%

Net interest margin

(Tax equivalent basis)

3.26

%

3.50

%

(A)

Excludes a $522 thousand gain from sale of classified loans in the March 2013 quarter. Including this gain, total revenue would have been $73,371.

(B)

Excludes a $2.87 million gain from sale of the Company's Pooled Trust Preferred Securities portfolio in the December 2012 quarter. Including this gain, total revenue would have been $72,706.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

THREE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)

December 31, 2013

December 31, 2012

Average

Income/

Average

Income/

Balance

Expense

Yield

Balance

Expense

Yield

ASSETS:

Interest-Earning Assets:

Investments:

Taxable (1)

$

213,779

$

1,103

2.06

%

$

267,890

$

1,423

2.12

%

Tax-exempt (1) (2)

57,358

333

2.32

47,262

327

2.77

Loans held for sale

1,186

17

5.76

4,355

48

4.40

Loans (2) (3)

1,491,667

14,422

3.87

1,125,490

12,107

4.30

Federal funds sold

101

-

0.10

100

-

0.10

Interest-earning deposits

38,351

17

0.18

66,942

41

0.24

Total interest-earning assets

1,802,442

$

15,892

3.53

%

1,512,039

$

13,946

3.69

%

Noninterest-Earning Assets:

Cash and due from banks

6,217

6,885

Allowance for loan losses

(14,385

)

(14,020

)

Premises and equipment

29,220

30,350

Other assets

64,818

76,251

Total noninterest-earning assets

85,870

99,466

Total assets

$

1,888,312

$

1,611,505

LIABILITIES:

Interest-Bearing Deposits:

Checking

$

410,409

$

98

0.10

%

$

346,373

$

87

0.10

%

Money markets

629,580

319

0.20

517,470

202

0.16

Savings

115,186

15

0.05

105,228

14

0.05

Certificates of deposit

158,085

393

0.99

180,941

528

1.17

Total interest-bearing deposits

1,313,260

825

0.25

1,150,012

831

0.29

Borrowings

61,585

281

1.83

12,258

95

3.10

Capital lease obligation

8,773

104

4.74

8,990

107

4.76

Total interest-bearing liabilities

1,383,618

1,210

0.35

1,171,260

1,033

0.35

Noninterest -Bearing Liabilities:

Demand deposits

364,463

311,920

Accrued expenses and other liabilities

11,159

8,144

Total noninterest-bearing liabilities

375,622

320,064

Shareholders' equity

129,072

120,181

Total liabilities and shareholders' equity

$

1,888,312

$

1,611,505

Net interest income

$

14,682

$

12,913

Net interest spread

3.18

%

3.34

%

Net interest margin (4)

3.26

%

3.42

%

(1)

Average balances for available for sale securities are based on amortized cost.

(2)

Interest income is presented on a tax-equivalent basis using a 35 percent federal tax rate.

(3)

Loans are stated net of unearned income and include nonaccrual loans.

(4)

Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

THREE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)

December 31, 2013

September 30, 2013

Average Balance

Income/ Expense

Yield

Average Balance

Income/ Expense

Yield

ASSETS:

Interest-Earning Assets:

Investments:

Taxable (1)

$

213,779

$

1,103

2.06

%

$

237,559

$

1,141

1.92

%

Tax-exempt (1) (2)

57,358

333

2.32

54,465

328

2.41

Loans held for sale

1,186

17

5.76

1,617

21

5.27

Loans (2) (3)

1,491,667

14,422

3.87

1,322,842

13,065

3.95

Federal funds sold

101

-

0.10

101

-

0.10

Interest-earning deposits

38,351

17

0.18

35,168

21

0.24

Total interest-earning assets

1,802,442

$

15,892

3.53

%

1,651,752

$

14,576

3.53

%

Noninterest-Earning Assets:

Cash and due from banks

6,217

5,962

Allowance for loan losses

(14,385

)

(13,615

)

Premises and equipment

29,220

28,984

Other assets

64,818

65,163

Total noninterest-earning assets

85,870

86,494

Total assets

$

1,888,312

$

1,738,246

LIABILITIES:

Interest-Bearing Deposits:

Checking

$

410,409

$

98

0.10

%

$

349,392

$

73

0.08

%

Money markets

629,580

319

0.20

580,819

275

0.19

Savings

115,186

15

0.05

115,711

15

0.05

Certificates of deposit

158,085

393

0.99

165,347

444

1.07

Total interest-bearing deposits

1,313,260

825

0.25

1,211,269

807

0.27

Borrowings

61,585

281

1.83

45,149

138

1.22

Capital lease obligation

8,773

104

4.74

8,828

105

4.76

Total interest-bearing liabilities

1,383,618

1,210

0.35

1,265,246

1,050

0.33

Noninterest -Bearing Liabilities:

Demand deposits

364,463

337,684

Accrued expenses and other liabilities

11,159

10,241

Total noninterest-bearing liabilities

375,622

347,925

Shareholders' equity

129,072

125,075

Total liabilities and shareholders' equity

$

1,888,312

$

1,738,246

Net interest income

$

14,682

$

13,526

Net interest spread

3.18

%

3.20

%

Net interest margin (4)

3.26

%

3.28

%

(1)

Average balances for available for sale securities are based on amortized cost.

(2)

Interest income is presented on a tax-equivalent basis using a 35 percent federal tax rate.

(3)

Loans are stated net of unearned income and include nonaccrual loans.

(4)

Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATION

AVERAGE BALANCE SHEET

UNAUDITED

TWELVE MONTHS ENDED

(Tax-Equivalent Basis, Dollars in Thousands)

December 31, 2013

December 31, 2012

Average

Income/

Average

Income/

Balance

Expense

Yield

Balance

Expense

Yield

ASSETS:

Interest-Earning Assets:

Investments:

Taxable (1)

$

230,158

$

4,606

2.00

%

$

303,599

$

7,033

2.32

%

Tax-exempt (1) (2)

53,038

1,307

2.46

46,780

1,363

2.91

Loans held for sale

5,498

285

5.18

2,487

123

4.94

Loans (2) (3)

1,290,247

51,311

3.98

1,094,696

48,112

4.40

Federal funds sold

101

-

0.10

100

-

0.10

Interest-earning deposits

60,685

152

0.25

41,303

98

0.24

Total interest-earning assets

1,639,727

$

57,661

3.52

%

1,488,965

$

56,729

3.81

%

Noninterest-Earning Assets:

Cash and due from banks

5,970

6,506

Allowance for loan losses

(13,653

)

(13,942

)

Premises and equipment

29,312

31,049

Other assets

69,197

77,048

Total noninterest-earning assets

90,826

100,661

Total assets

$

1,730,553

$

1,589,626

LIABILITIES:

Interest-Bearing Deposits:

Checking

$

366,703

$

323

0.09

%

$

336,228

$

379

0.11

%

Money markets

578,819

1,048

0.18

510,633

1,022

0.20

Savings

113,914

59

0.05

101,068

70

0.07

Certificates of deposit

167,921

1,823

1.09

188,918

2,237

1.18

Total interest-bearing deposits

1,227,357

3,253

0.27

1,136,847

3,708

0.33

Borrowings

32,894

603

1.83

25,277

548

2.17

Capital lease obligation

8,855

421

4.75

9,067

431

4.75

Total interest-bearing liabilities

1,269,106

4,277

0.34

1,171,191

4,687

0.40

Noninterest -BearingLiabilities:

Demand deposits

326,286

296,250

Accrued expenses and other liabilities

9,460

6,977

Total noninterest-bearing liabilities

335,746

303,227

Shareholders' equity

125,701

115,208

Total liabilities and shareholders' equity

$

1,730,553

$

1,589,626

Net interest income

$

53,384

$

52,042

Net interest spread

3.18

%

3.41

%

Net interest margin (4)

3.26

%

3.50

%

(1)

Average balances for available for sale securities are based on amortized cost.

(2)

Interest income is presented on a tax-equivalent basis using a 35 percent federal tax rate.

(3)

Loans are stated net of unearned income and include nonaccrual loans.

(4)

Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.